African Journal of Business Management Vol. 6(9), pp. 3482-3489, 7 March, 2012 Available online at http://www.academicjournals.org/AJBM DOI: 10.5897/AJBM11.2154 ISSN 1993-8233 ©2012 Academic Journals

Full Length Research Paper

Fiscal planning and local government administration in : The quest for sustainable rural development

Samihah Khalil and Salihu Abdulwaheed Adelabu*

Ghazali Shafie Graduate School of Government, College of Law, Government and International Studies, Northern University of Malaysia, 06010, UUM Sintok, Kedah, Malaysia.

Accepted 7 October, 2011

The raison d’etre of a local government is to collect its revenue efficiently and to use that revenue to provide infrastructural development for its tax payers. Local government as the third tier of government cannot, therefore be ideal from the financial view lens if it collects its revenue in a slip-shod manner and devotes a large percentage of it to the maintenance of a top- heavy administrative set-up, with a relatively small proportion of the revenue left for the provision of infrastructural development which are of direct benefits to the local inhabitants. The purpose of this paper is to critically examine local government accountability in respect of budget and budgeting system in order to improve sustainable development at the local level. The paper tries to study the main source of revenue of local governments in Nigeria, and determine how the resources are utilized to deliver infrastructural development to the people. Also, information on budget and budgeting of local government is analyzed in the study. There are 774 local governments in Nigeria. This research study covers 33 local governments in terms of disbursement of statutory allocation, and Irepo local government in terms of budget and budgeting analysis. As far back as 1999, the Nigerian local governments are being given enough by the Federal Government in order to provide infrastructural development to the citizens in the local area, but it seems the said public revenue are being mismanaged by political leaders and local governments’ officials in Nigeria. The findings of this paper revealed that < 5% of the statutory allocation accrued to the local governments under consideration is being expended on infrastructural development, while > 10% is used for personnel expenditure as the cost of delivering infrastructural development by local governments in Nigeria. So, further researches can still be carried out on fiscal planning by local governments for sustainable development in the remaining local governments in Nigeria. This paper therefore recommended that the policy/decision-makers should make use of the findings of this study to help inform future decisions on fiscal planning in the local government administration in order to bring about sustainable development to the rural dwellers in the local governments. It is found that there is need for proactive measure for fiscal planning in order to sustain infrastructural development in the local government administration. Also found, is that local governments need to put in place a good fiscal planning that will sustain development at the local level.

Key words: Fiscal planning, sustainable development, local government.

INTRODUCTION

Local government as an institution of governance is crea- citizenry and also extends the administrative and political ted to provide and sustain infrastructural development control to the community (Wanjohi, 2003). Ola (1984) in rural area. A local government is an institution whose posited that local governments exist to provide essential operations address the needs and aspiration of the services, and serve as a vehicle for rural development. Adamolekun (1983) posited that the goal of local government is to provide efficient service delivery vis-à- vis rural development. Researchers (such as Mass, 1959, *Corresponding author. E-mail: [email protected]. Oladosun, 1981, Adamolekun, 1983, Ola, 1984; Aghayere, Khalil and Adelabu 3483

1987; Okeem, 1989; Lawal, 2000) in the recent past have different reforms in the public service, local government discussed extensively about sustainable development in administration in Nigeria experienced fundamental the rural areas. There exists a series of strategic planning changes in 1976 through a comprehensive local for bringing sustainable development to the society. Few government reform during the reign of General Olusegun amongst these strategic planning are fiscal planning by Obasanjo (Gboyega, 1983; NCEMA, 1990). institutions, participatory governance, policy and scenario According to Awotokun (2005), the term local analysis, monitoring and evaluation process in the government administration in Nigeria attracted serious organization. All these unprecedented strategies will lead attention both nationally and internationally since 1976 to sustainable development. reform. It is the reform that opened the rural area to According to OECD (2001), there is an unprecedented meaningful development in terms of input that could be development in the past few years in developing garnered from the federation account. The 1976 local countries. Life expectancy ratio has risen, infant mortality government reform created for the first time, a single tier rate is increased, and primary school enrolment rate is structure of local government administration in Nigeria. doubled. Food production and consumption is said to be This single tier structure can be seen in form of the func- increased by 20% faster than population growth. tions, the structure, the financial resources, the place of Improvement in income levels, health and educational traditional institutions, relationships with state govern- attainment are on the increase. There is equally an ment; and law enforcement in the local governments. increase in the spread of democratic, participatory gover- Following the 1976 reform, a fixed proportion of sta- nance, and there have been forward leaps in technology tutory allocation of revenue from the central government and communications. Development is synonymous to to local governments is entrenched in the recommen- freedom in any community. If a society is developed, the dations of the Aboyade Revenue Commission of 1977 people in that particular society is always said to be free (Awotokun, 2005). This leads to the establishment of the from diseases, hunger, poverty, illness, illiteracy, igno- Revenue Mobilization Allocation and Fiscal Commission rance, joblessness, and insecurity. Sustainability could be (RMAFC), and the commission is charged with the the right word to describe development. In pursuit of responsibility of allocating revenue to the three tiers of development, access to resources ought to be made free government - federal, state and local. Other commissions for any community. According to Lawal (2000), the that have worked on the disbursement of federal statutory development of the rural dwellers has been the concern allocation before the Aboyade com-mission are Phillipson of every responsible and responsive government. He (1946), Hicks-Phillipson (1951), Chick (1953), Raisman argued further that development remains insignificant, if (1958), Binns (1964), Dina (1968), and Okigbo (1980) development does not positively affect the lives of the worked on statutory allocation disbursement after the people in any society in question. Aboyade commission. King and Murray (2002), opined that development is As agent of rural development, local governments are emphasized to be freedom from fear, which include to use the funds made available to the local governments freedom from human want (human development), and by both central and state governments and their internally may comprehensively cover all the menaces that generated revenue to improve on the lives of the people threaten human survival, daily life and dignity. In order to within local government’s area of operation through the deliver the required social services to the rural dwellers in following: Initiating and attracting developmental projects Northern Ireland, Greer’s (2001, 2002) work on to the local governments such as provision of access partnership governance. Greer et al. documented the roads, water, and rural electricity; communal services pervasiveness of partnerships among local authorities, such as the construction of roads, bridges, water ways; and comprehensively explore range of case studies in and personal welfare in such areas as education, relation to sectoral and spatial relationships. Each of the housing, and healthcare service delivery system. Local Greer’s study established potential linkages and formu- governments can equally generate revenue to improve lates a strategic framework for development among on the lives of the people within their areas of operation private sectors, and public, which is what is known as pri- through initiating and attracting developmental projects to vate public partnership (PPP). Improving service delivery the local governments such as provision of access roads, is an important way of improving the economic and social water and rural electricity; sustaining livelihood through values of humanity. the provision of credit facilities for agriculture, arts, crafts and small scale business; and encouraging the formations of cooperative societies and other economic LOCAL GOVERNMENTS: A PANACEA FOR RURAL groupings (Ajayi, 2002). Local government as a public DEVELOPMENT business consumes huge resources in providing vital services which are managed by elected and appointed In order to bring sustainable development to the rural officials. dwellers in Nigeria, there must be a good fiscal planning In Nigeria, the responsibility of providing basic essential by local government administration. As a result of services and bringing about development has been 3484 Afr. J. Bus. Manage.

delegated to local government as the third tier of governments’ spending on infrastructural development. It government. The types of social services that a local should be noted that the degree of fiscal decentralization government may require to provide include housing, in terms of spending tends to be greater in richer water, education, electricity, roads and transport, health countries than in poorer countries (Wasylenko, 1987). facilities and other social services. As a consequence, Bird and Vaillancourt (1995) in another study found out local governments have to effectively identify and target that local government in developed countries financed essential infrastructure and social services at any parti- only 62% of their expenditure from their internally cular point in time, neediest communities, have systems generated revenue (IGR), while local governments from in place to track expenditure on projects and be able to developing countries financed 88% of their expenditures determine if the allocation of resources has an impact. from the fiscal transfer from the central governments. So, it is imperative that any work done within the social Specifically, in Chile and Malaysia, local government accountability arena should have a strong focus on financed more than 60% of their expenditures from their service delivery within the local government’s environ- own revenues in 1990, while local governments in ment. The most immediate need is to improve the ability Argentina, India and Pakistan had lower levels of of citizens to engage with the local governments so that financial autonomy (say 38 to 50%), and local they may be empowered in gaining an understanding of governments in Indonesia had a proportion of 21% in where the priority areas are and what the local govern- 1989 (UNDP, 1993). In Nigeria, fiscal transfer is not ments are planning to do. It will also give citizens an encouraging until 1999, and local governments depend opportunity to hold local governments accountable for the largely on national fiscal transfers for their expenditures. delivery of social services. In fact, the bulk of local governments’ expenditures, Adedeji (1970) blamed the ineffectiveness of local descriptively 90% of their expenditures are financed by administration on the following reasons: lack of mission the statutory allocation disbursed by the central or lack of comprehensive functional role; lack of proper government. The national fiscal transfers have become a structure (that is, the role of local governments in the central aspect of decentralization process. development process was not known); low quality of staff; Bird and Slack (1991) identified two broad charac- and low funding. According to him, these problems led teristics of decentralization. First, no matter what local the local governments into a vicious circle of poverty governments spend, and whatever the money is spent because inadequate functions and powers lead to on, the revenue resources under them are always less inadequate funding which result in the employment of low compared to their expenditure responsibilities. The skilled and poorly paid staff. In contradistinction to the second characteristic is that not all sub national govern- position of Adedeji (1970), there has been tremendous ments are equal. Some are rich, while some are poor. improvement in the quality of staff, funding of local Those local governments from rich countries (mostly in government, functions and responsibilities of local Scandinavia) do have access to large and elastic tax government in Nigeria. The area that seems to be lacking bases. So, they often have access to enough revenues to is the area of weak institution which leads to embezzle- develop their localities. This may not be applicable to ment (Lawal, 2002), and poor managerial accountability many local governments in the developing countries (Salihu, 2011). including Nigeria.

COMPARISON OF FISCAL EXPENDITURES AMONG DECENTRALIZATION OF RESOURCES AND COUNTRIES RESPONSIBILITIES AMONG TIERS OF GOVERNMENT Some researchers have done a lot of studies on fiscal planning both in developing and developed countries in Sustainable rural development is the cornerstone of local order to sustain development in the rural areas. Bahl and government administration in Nigeria. This can only be Linn (1992) conducted a survey on fiscal expenditures of possible if the system of co-responsibility between twenty-one developing countries and found out that institutions of governance at the central, states and local between 6 and 50% of total government spending, with government according to the principle of subsidiary could an average of 23% are accounted for by local be effectively established. This eventually leads to the governments. For ten developed countries, OECD (1991) issue of decentralization among the three tiers of govern- found out that the comparable range is from 12 to 53%, ment. Decentralized governance, if carefully planned, with an average of 26% being spent by local effectively implemented, and appropriately managed is governments. Bird and Vaillancourt (1995) found out that bound to lead to significant improvement in the welfare of an average of local expenditure share of 22% for people. According to Robertson (1999), decentralization eighteen developed countries and only 9% for sixteen aims at transferring decision-making authority, resources developing countries are being used for sustainability. and responsibilities for the delivery of welfare services Due to inaccurate records keeping, it is hard to obtain from the central government to other lower levels of data on the importance of local (and other sub national) government, agencies, and field offices of central Khalil and Adelabu 3485

government line agencies. This transfer serves two basic statutory allocation is provided in the 1999 constitution of purposes, namely accountability for resource manage- the federal republic of Nigeria. ment and effective service delivery. Nigeria is one of few In the constitution, section 160, subsection 2 to 8 countries in the developing world to have significantly empower the revenue mobilization allocation and fiscal decentralized both resources and responsibilities to local commission (RMAFC) with the responsibility of keeping governments in order to bring about sustainable the federation account and allocating the accrued development to the people. revenue to the three tiers of government. The percentage Decentralization therefore is seen as a process of allocated to local governments is 20% of the revenue in government policy that transfers responsibilities, the federation account. This fund is shared among the resources, and/or authority from higher to lower levels of seven hundred and seventy-four local governments in the government. Thus, lower levels of government are the following ratio: 40% on the basis of equality; 40% on the recipients of the transferred responsibilities, resources basis of population; 11.25% on the basis of direct primary and authority. There are various degrees of decentra- school enrolment; 3.75% for inverse primary school lization in which few amongst them are fiscal, enrolment; and 5% for internally generated revenue administrative, institutional, economical, and political effort. Revenues being distributed under federal statutory decentralization. The concern of this paper is on fiscal allocation is gross statutory allocation, excess crude decentralization. Fiscal decentralization therefore refers proceed, and value added tax (VAT). This allocation is to the set of policies designed to increase the revenues disbursed on monthly basis. or fiscal autonomy of sub national governments. Unlike other definitions of fiscal decentralization that merge revenues and expenditures together, Wibbels (2004) saw FISCAL TRANSFERS BY THE CENTRAL revenues as fiscal decentralization, while expenditures as GOVERNMENT TO LOCAL GOVERNMENTS IN OYO administrative decentralization. This analytical separation STATE makes it easier to evaluate the consequences of decen- tralization processes where the transfer of revenues and For the purpose of this study, local governments in Oyo expenditures do not go hand in hand. State are classified into three categories, namely urban, In one of his studies, Manor and Richard (1998) went semi-urban, and rural respectively. The research paper further to state the fiscal data of what is being decen- collects a secondary data on the detail distribution of tralized to the sub national governments by the central federal statutory allocation to the thirty-three local govern- government. According to him, the sub national ments in in Nigeria for years 2007, 2008, and governments around the world collected an average of 2009. The detail distribution includes Gross Statutory 15% of the revenues of the national governments, and Allocation, Excess Crude Proceed from Excess Crude spent 20% as expenditures. By the year 2000, the figure Account (ECA) and Value Added Tax (VAT). Funds rose to 19 and 25%, respectively. In this context, the disbursed for the local governments under consideration disbursement of revenue is viewed as fiscal are given in Table 1a. A sum total of #153.07 billion is decentralization, while the delivery of welfare services is disbursed to the thirty three local governments in three viewed as administrative decentralization. Administrative years by the central government in Nigeria. decentralization may have positive or negative impact on From Table 1a urban local governments collect #31.77 the autonomy of local government executives. If billion in three years, while semi-urban local governments administrative decentralization improves local collect #77.61 billion in three years. And rural local bureaucracies, fosters training of local officials, and governments collect #43.69 billion in three years. For the facilitate learning through the practice of delivering new purpose of this study, the need arises to extract the responsibilities, it will surely increase the organizational statutory allocation of Irepo local government for the capacities of local government administration. fiscal year 2008. The statutory allocation disbursed to Contrarily, if administrative decentralization takes place Irepo local government for the fiscal year is given in the without adequate transfer of funds, it may decrease the Table 1b. Table 1b shows the detail distribution of autonomy of local government officials; because they are statutory allocation to Irepo local government for the largely depend on national fiscal transfers for the delivery fiscal year 2008. The purpose of the fund is to deliver of social services. In Nigeria, the nucleus of funds being infrastructural development to people in the local used by local governments is provided by the federal government area in Nigeria. government. Previous researches have shown this fund to be 90%. Other 10% is derived from various state governments, and the third source of funding is through LOCAL GOVERNMENT BUDGET FOR SUSTAINABLE the internally generated revenue (IGR) by local govern- DEVELOPMENT ments. The federal government requires a measure or law to determine the distribution of the monthly statutory There must be projected estimates, and a form of fixed allocation to be disbursed to each local government in fiscal decentralization in the administration of local Nigeria. The measure used for the distribution of the governments, if infrastructural development is to be 3486 Afr. J. Bus. Manage.

Table 1a. Detail distribution of statutory allocation to Oyo State local government councils according to rural, semi-urban, and urban (municipal) local government classification for 2007, 2008, and 2009.

Rural local government Semi-urban local Urban (Municipal) local S/No. Local government councils councils government councils government councils 3.0 – 4.0 (#Billions) 4.1 – 5.0 (# Billions) 5.1 – 6.0 (# Billions) 1. L.G - 4.20 - 2. L.G - 4.91 - 3. L.G - 4.89 - 4. L.G - 4.85 - 5. L.G - - 5.24 6. North L.G - - 5.42 7. Ibadan Northeast L.G - - 5.49 8. Ibadan Northwest L.G - 4.38 - 9. Ibadan Southeast L.G - - 5.30 10. Ibadan Southwest L.G - - 5.50 11. L.G 3.85 - - 12. L.G 4.04 - - 13. Iddo L.G 4.00 - - 14. L.G - - 5.80 15. L.G 4.07 - - 16. Irepo L.G - 4.45 - 17. L.G - - 5.56 18. L.G - 4.62 - 19. L.G - 4.37 - 20. L.G 4.06 - - 21. L.G - 4.94 - 22. Lagelu L.G - 4.45 - 23. L.G - 4.68 - 24. L.G 3.98 - - 25. L.G 3.71 - - 26. Oluyole L.G - 4.76 - 27. L.G - - 5.38 28. L.G 4.06 - - 29. Oriire L.G - 4.94 - 30. L.G - 4.16 - 31. L.G - 4.13 - 32. L.G - 4.17 - 33. Surulere L.G - 4.71 - Total 31.77 77.61 43.69

#1000 = USD 6.67. Source: Accountant - General office, Federal Ministry of Finance, Abuja, Nigeria (2010).

sustained. There is a pattern which local governments government of Oyo state for the fiscal year 2008. The must follow in preparing their estimates of income and budget analysis revealed that a sum of #318, expenditures. 325,100.00k is voted for capital expenditure. This sum The scope of this paper is limited to one local represents 56.35% of the total budget, and < 5% of the government, which is Irepo local government of Oyo statutory allocation disbursed to the local government for State. The 2008 approved estimates for Irepo local the fiscal year 2008. Besides, the cumulative total for government is analyzed to determine the rate of sustain- expenditure (capital and recurrent) is given as #246, 458, able development in the local government administration. 900.00k, representing 43.65%. Lastly, provision is not Table 2a above shows the overall summary of approved made for 10%stabilization of the statutory allocation in estimates for income and expenditures of Irepo local the budget analysis for the fiscal year 2008. Khalil and Adelabu 3487

Table 1b. Distribution details of statutory allocation of Irepo Local Government, Oyo State for the fiscal year 2008.

Gross statutory Excess crude Value added tax Month Differential Total allocation allocation proceed (VAT) January 52,238,114.04 - - 10,295,678.49 62,533,792.53 February 53,842,157.64 - 45,827,354.45 10,018,648.35 109,688,160.44 March 87,047,888.09 - - 11,642,800.67 98,690,688.76 April 72,169,163.06 (239,015.51) 79,638,240.20 9,121,459.66 160,689,847.42 May 68,016,509.37 - 18,452,255.80 10,957,771.53 97,426,536.70 June 89,761,496.03 - 344,083,680.49 11,441,557.16 445,286,733.68 July 70,284,599.66 - 16,527,892.70 11,389,667.22 98,202,159.57 August 80,285,486.22 - 6,601,110.95 12,975,986.23 99,862,583.40 September 71,493,225.62 - 15,075,995.43 9,810,749.40 96,379,970.46 October 68,777,397.98 - 17,993,558.98 11,434,185.77 98,205,142.68 November 64,509,695.37 - 22,412,546.48 12,219,499.42 99,141,741.27 December 67,158,106.09 - 19,245,349.04 10,647,684.18 97,051,139.30 Total 845,583,839.17 (239,015.51) 585,856,984.52 130,955,688.08 1,563,168,495.21

Table 2a. Extraction from Irepo Local Government approved estimates for 2008 budget analysis.

S/No Details Amount (N) Percent 1. Capital expenditure 318,325,100.00 56.35 2. Overhead cost 79,086,980.00 14.00 3. Personnel cost 152,194,920.00 26.94 4. Stabilization (10%) of statutory allocation - - 5. Traditional Council (5%) of statutory allocation 15, 300,000.00 2.71 Total 564,907,000.00 100

The approved estimates of Irepo local government for The expenditure for overhead and other expenditures the fiscal year 2008 shows the recurrent revenue aside for consecutive three years under review is said to be > the statutory allocation disbursed by the central 10%. government (Table 2b). The theme of generating revenue As can be seen from the budget analysis, 56.35% is on recurrent basis is largely depended on provision of earmarked for capital expenditures, while the remaining infrastructural development. And these infrastructures 43.65% is voted for recurrent expenditure in form of over ought to be sustained from the recurrent revenue being head cost, personnel emolument, and other expenditures generated as internally generated revenue. Table 2c that could be seen as cost of delivering welfare, social shows the summary of capital expenditure of Irepo local services and other infrastructural development. In line government for the fiscal year 2008. This table shows the with the position of Lawal (2002) that enough fund is not trend of infrastructural development in the local being voted for infrastructural development, this study government under consideration. shows that < 5% is being voted for capital expenditure Table 2d shows the estimates for personnel emolu- because 56.35% is < 5% of the total fund disbursed to ments. It becomes inevitable to include this recurrent Irepo local government for the fiscal year under review. expenditure because it is being used as cost of delivering Also, Salihu (2011) found out that > 10% is being spent infrastructures in the local governments. From the budget as cost of delivering infrastructural development by local analysis of Irepo local government for the fiscal year governments in Oyo State. The finding in this study 2008, the following findings could be deduced from the affirmed the position of Salihu (2011), because 43.65% of study, and it is shown in Table 3. Table 3 shows that fund the statutory allocation is already > 10% of the fund budgeted for capital expenditure is given as 20.36% of disbursed by central government for the fiscal years the total allocation for the fiscal year 2008. The calcu- under review, which is the concern of this study. lation for three consecutive fiscal years 2007, 2008 and Then, if development must be sustained at the local 2009 is given as < 5%. But the approved estimates for governments’ level, there must be good fiscal planning in overhead costs and other recurrent expenditure are given order to meet the needs and aspiration of people, as 79.64% (that is the sum of 15.77 and 63.87%). especially the rural dwellers. 3488 Afr. J. Bus. Manage.

Table 2b. Summary of recurrent revenue.

Approved estimates Actual estimates for Head Details of revenue Estimates for 2009 (N) for 2008 (N) 2008 (N) 1001 Taxes 310,000.00 195,000.00 310,000.00 1002 Rates 700,000.00 60,000.00 700,000.00 1003 Local licenses fees and fines 197,717,00.00 3,625,546.00 19,967,000.00 1004 Earnings from commercial undertaking 3,122,000.00 1,021,670.00 4,353,000.00 1005 Rent of Local Govt. property 35,000.00 30,000.00 35,000.00 1006 Interest payment and dividends 520,000.00 527,726.00 520,000.00 1007 Re-imbursement grant 2,000,000.00 952,375.13 2,000,000.00 1008 Miscellaneous (1% of contract tax) 2,022,000.00 527,332.29 2,022,000.00 Sub total 28,426,000.00 6,939,649.42 29,907,000.00

Statutory allocation 300,000,000.00 254,525,485.00 306,000,000.00 Value Added Tax 100,000,000.00 102,015,684.00 123,000,000.00

1009 Special fund from Fed. account (Excess 450,000,000.00 70,000,000.00 84,000,000.00 Crude oil)

10% State IGR 25,000,000.00 18,117,919.13 22,000,000.00 Total recurrent revenue 903,426,000.00 451,598,737.42 564,907,000.00

Table 2c. Summary of capital expenditure heads of the estimates for 2008.

Classification of expenditure Approved estimates Actual estimates for Classification Estimates for 2009 (N) Economics for 2008 (N) 2008 (N) 4001 Agriculture and rural development 12,010,000.00 24,510,000.00 - 4002 Livestock 3,500,000.00 9,500,000.00 - 4003 Forestry 1,500,000.00 2,500,000.00 - 4004 Fishery 2,750,000.00 3,500,000.00 - 4005 Manufacturing and craft 50,000.00 50,000.00 - 4006 Rural electrification 11,500,000.00 39,000,000.00 -

Commerce, finance, cooperative and 4007 6,000,000.00 16,000,000.00 3,343,436.00 supply

4008 Transportation (road and bridges) 160,476,450.00 323,200,000.00 38,268,637.58 Total economics 197,786,450.00 415,760,000.00 46,051,075.00

Social sector 5001 Education 22,550,000.00 68,900,000.00 2,103,398.00 5002 Health 25,978,100.00 45,478,100.00 4,691,500.00 5003 Information 4,800,000.00 12,300,000.00 10,351,100.00 5004 Social development, sport and culture 5,750,000.00 16,850,000.00 4,934,000.00 5005 Fire services 500,000.00 500,000.00 70,000.00 Total social sector 59,578,100.00 144,028,100.00 22,149,996.25

Source: Irepo Local Government Council, Kisi: Draft estimates for 2009.

CONCLUSION governmental transfers to guide and shape local investments in the areas of infrastructures and welfare Using fiscal planning as an essential ingredient of services. In Nigeria, special grants are often provided by improving the life of the poor in the local government will the central government to construct primary healthcare bring about rapid development to the rural dwellers. A centers, classroom buildings, water projects, construction number of developing countries have been using inter- of roads, etc. This is in line with what is obtainable in Khalil and Adelabu 3489

Table 2d. Estimates for personal emoluments.

Head/Sub- Approved estimates for Actual estimates for Estimates for 2009 Details of expenditure head 2008 (N) 2008 (N) (N) 2001 Office of the Chairman 18,039,350.26 19,865,886.35 26,048,619.96 2002 Office of the Secretary 3,189,153.92 1,666,044.51 2,230,076.00 2003 Office of the Councilors 16,004,802.72 21,656,433.20 24,140,379.60 2004 Personnel management 29,255,823.00 27,580,042.00 26,960,988.00 2005 Finance and supplies 19,971,400.00 18,080,431.00 18,173,800.00 2006 Education and social services 5,685,962.00 5,833,832.00 8,960,731.00 2007 Health 31,614,708.00 29,364,935.22 31,200,082.00 2008 Agriculture and natural resources 6,392,352.00 6,518,646.00 7,172,256.00 2009 Works 25,570,116.00 23,388,560.00 23,656,080.00 2011 Traditional office 1,183,332.00 1,187,702.00 790,320.00 Total 156,907,000.00 155,142,512.28 172,324,060.56

Table 3. Deduction from secondary data from Irepo Local Government for 2008.

Statutory allocation Capital expenditure Overhead costs Others for fiscal year 2008 1,563,168,495.21k 318,325,100.00k (56.35%) 246,581,900.00k (43.65%) - (100%)

318,325,100.00k divides by 246,581,900.00k divides by The differential is given Derivations 1,563,168,595.21k multiply by 100 1,563,168,595.21k multiply by 100 as 63.87% equals 20.36% equals 15.77%.

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